China’s low-sulfur fuel oil (LSFO) output saw a rally in June 2025 due to refinery unit restarts, but overall domestic bunker fuel demand remained weak, indicating a cautious market sentiment among shipowners. Meanwhile, China’s bonded bunker fuel imports experienced a significant rebound in May, with Russia emerging as the largest supplier.
China’s LSFO Output Rallies in June
China’s LSFO output increased in June 2025, reaching approximately 1.02 million metric tons. The daily output rose by 10.58% month-on-month to 34,067 metric tons, according to JLC data. This rally was primarily driven by unit restarts at several refineries.
However, the increase was somewhat limited by ongoing maintenance activities at some refineries and unfavorable production margins.
- Sinopec maintained a relatively stable LSFO production in June, although Shengli Oilfield and Jinling Petrochemical reduced output due to mid-month maintenance. This was offset by Shanghai Gaoqiao Petrochemical, Hunan Petrochemical, and Tianjin Petrochemical, which boosted production after completing their turnarounds.
- PetroChina saw a modest rise in production as Jinxi Petrochemical restarted units. However, Jinzhou Petrochemical and Liaohe Petrochemical slightly cut their output.
- CNOOC recorded a significant boost in output, with Huizhou Refinery resuming production and Zhoushan Petrochemical and Taizhou Petrochemical ramping up their operations.
- ZPC and Sinochem did not produce any LSFO in June, though Sinochem did export 10,000 metric tons of Marine Gas Oil (MGO).
Despite the month-on-month increase, China’s LSFO output in June 2025 was 22.75% lower year-on-year.
Domestic-Trade Bunker Fuel Demand Weakens in June
Domestic-trade bunker fuel demand continued to weaken in June, as most shipowners maintained a “wait-and-see” attitude.
- Domestic-trade heavy bunker fuel demand slipped to 340,000 metric tons, a 5.56% (20,000 metric tons) decrease from the previous month, as per JLC data. Most purchases were for rigid demand, even though market sentiment showed a slight bullish inclination.
- Domestic-trade light bunker fuel demand also declined to 140,000 metric tons, down 6.67% (10,000 metric tons) month-on-month. Diesel demand remained lackluster, partly due to the ongoing fishing moratorium.
Bunker Fuel Supply: Bonded Imports Rebound in May
China’s bonded bunker fuel imports rebounded significantly in May 2025, driven by increased purchases of imported LSFO by domestic refiners to compensate for tightened domestic supply.
- Chinese bunker suppliers imported 610,500 metric tons of bonded bunker fuel in May, representing a substantial 16.17% month-on-month boost and a remarkable 97.06% year-on-year surge, according to JLC’s calculation based on General Administration of Customs of China (GACC) data.
- The decline in domestic LSFO output, due to more refinery maintenance, forced bonded distributors to increase orders for imported LSFO. Additionally, HSFO (High-Sulfur Fuel Oil) imports rose due to growing demand, while MGO arrivals dropped as domestic production increased and demand remained tepid.
Russia emerged as the largest bonded bunker fuel supplier to China in May, climbing from fourth place in April. Russia exported 377,700 metric tons, accounting for 61.88% of China’s total imports.
- Singapore came in second with 144,500 metric tons (23.67%).
- South Korea ranked third with 50,300 metric tons (8.23%).
- Malaysia ranked fourth with 38,000 metric tons (6.22%).
For the period of January-May 2025, China’s bonded bunker fuel imports totaled 2.66 million metric tons, marking a robust 64.54% year-on-year surge.
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Source: Manifold Times
